Lotte Mart urged to halt the sale of fried chicken

Customers stand in line to buy cheap fried chicken at Lotte Mart's store in Seoul in this December 2010 file photo. When it began offering its first 5,000 won fried chicken deal. Starting Wednesday, the discount chain operator began holding a similar sales event that will last until May 8 to commemorate its 21st anniversary. Korea Times file

By Kwak Yeon-soo

Fried chicken franchises are urging Lotte Mart to stop selling fried chicken at heavily-discounted prices, claiming that the discount store threatens the livelihoods of their store owners, many of which are retirees.

From May 1, Lotte Mart has been offering cheap chicken ― 5,000 won ($4.3) a bucket, which is one-third the price charged at regular outlets ― and said the sale would take place until May 8.

Although L-Point membership users can buy a bucket of fried chicken at 5,000 won, it is otherwise priced at 7,810 won, according to Lotte Mart.

“Because Lotte Mart, a conglomerate, is threatening the survival of small businesses, it should be prevented from selling cheap fried chicken,” said an official at the Korea Franchise Association (KFA).

The fried chicken industry has one of the most competitive and vulnerable business environments, marking the highest number of operators, the lowest annual sales and the highest debt ratio, according to the lobby group for smaller food and retail chains.

“The number of chicken franchise shutdowns is growing in Korea due to the economic recession and the rise of the minimum wage,” the official added.

Lotte Mart said it has no immediate plans to end the offer, saying that it has no intention of monopolizing the market.

“We're offering ultra-cheap chicken on a special occasion for a short period of time,” a Lotte Mart official said. “It's a bit harsh to accuse us of being a threat to neighborhood chicken franchise stores.”

It is not the first time that a dispute has arisen between discount store chains and small businesses. Lotte Mart held a similar event from March 28 to April 3 to commemorate its 21st anniversary.

Meanwhile, demand for ultra-cheap chicken has been strong. Customers come early in the morning and join a long queue to get fried chicken, according to Lotte Mart.

The discount store expects that it will sell out its stock of around 130,000 to 150,000 chickens within a week.

“Customers love it. Many of them are happy to save money. In fact, they want more of such promotional events,” the Lotte Mart official said.

The quarrel between discount store chains and small businesses has raised suspicion over price-fixing in chicken franchises because the price of a fried chicken, mostly above 15,000 won, is so much more than the price of raw chicken, which was 1,790 won in March.